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Rhode Island Acts Like a “Ring-A-Ling” Not Taxing Ringtones, But Taxing Ringtone Apps

The Rhode Island Department of Taxation recently revised its regulations to make software delivered electronically taxable.


So, as of October first, RI citizens will be taxed for every app they buy on their cell phone,  every game they buy through their console, and every piece of software they buy online.  But the weird part is that digital music and movies are not taxed.


So if you buy music online you are not taxed, but if you buy music software to listen to the music, you are taxed.  Likewise, you can buy ringtones through your cellphone without taxes, but if you buy a ringtone app you are taxed.


This biforcation of the tax code does not make any sense.  What makes even less sense is that the RI Division of Taxation is going against its own legislature.


Two months ago, the RI legislature decided to not tax digital goods.  Perhaps it is because digital goods are the greenest way to buy content, or perhaps its because these taxes will drive away businesses.  Or maybe the legislature realized that in the end, it’s just another tax on RI citizens who are already struggling to make ends meet.


So just one week after we placed digital goods taxes on the iAWFUL list and 8 weeks after I wrote a blog thanking the RI Legislators for not imposing taxes on digital goods, today I question the RI Division of Taxation for not following our recommendations and their own legislators’ lead.


Here’s hoping that RI soon changes its rules so that I might download a paid version of iTunes tax free to listen to my purchased music.